Report writing Key essentials

Transcription

1 Report writing Key essentials 1 st February 2014 CA Kamlesh Khanchandani

2 Background 2 of 25

3 Background Audit report is a very important document for it communicates not only the work done, but also highlights the state of affairs of the processes or departments. It is therefore imperative that it is written and communicated well as it can act as a positive change agent prompting the management to take corrective action. 3 of 25

4 Internal audit 4 of 25

5 Role of Internal Audit A tool to measure the effectiveness of processes & systems Evaluates compliance with statutes, internal policies, local laws etc. Identify the shortcomings/gaps in the processes Recommending necessary corrective and preventive action Audits are conducted through a mix of: Sample checks of transactions Observations of the process followed Interviews with the auditees 5 of 25

6 Internal Audit process of 25

7 Issue of audit report Key issues are highlighted and the draft report is shared with the Manager/Functional Head Discussions are held with the concerned process owner and feedback is sought Depending on inputs/ updates provided, the observation may be modified and the Functional Head is required to provide Management response in the form of action plan for rectification / improvement and timelines Completed Final report is forwarded to Functional Head, Head of Audit, Functional Manager and to the CEO/COO 7 of 25

8 Audit report follow-up In case of delays due to reasons beyond control of the auditee, the concerned auditee to seek approval from the Reporting Manager in writing and inform the Internal Audit department and request for an extension of timeline. However the revised timeline should be mentioned in such a communication. Once implemented, auditee to ensure adherence to the revised process / system on an on-going basis 8 of 25

9 Standard on Internal Audit Reporting 9 of 25

10 Purpose of the Standard The purpose of this Standard on Internal Audit (SIA) is to establish standards on the form and content of the internal auditor s report issued as a result of an internal audit performed by an internal auditor of the systems, processes, controls including items of financial statements of an entity. 10 of 25

11 Basic Elements - Highlights Statement of the objectives and scope of the internal audit engagement; Executive Summary, highlighting the key material issues, observations, control weaknesses and exceptions; Action Taken Report Action taken/ not taken pursuant to the observations made in the previous internal audit reports; 11 of 25

12 Key requirements in the internal audit report Clear Factual Specific Concise Unambiguous Timely complies with generally accepted audit procedures in India, as applicable. 12 of 25

13 Report writing 13 of 25

14 Key elements Make a Headline It should be like the newspaper headline i.e. accurately summarize the report s message Summarise The first paragraph should summarise the report s key points Details This must explain the provide adequate details including evidence for the statements made in the summary paragraph 14 of 25

15 Do s and Don'ts Don t used biased language Avoid using positive or negative tone. Just state the facts Do not use jargon Do not show lots of data. Show only relevant data Be accurate, but brief and clear 15 of 25

16 Avoid Filler Phrases It is a sound or word that is spoken in conversation by one participant to signal to others that he/she has paused to think but has not yet finished speaking For example: a. During our review we noted that. b. Review of so and so indicated that.. c. Procedures must be developed to ensure that.. d. Internal audit found out e. We reconciled so and so with so and so and found that.. 16 of 25

17 Avoid Redundant Modifiers Modifier is an optional element in the phrase. A modifier is so called because it is said to modify another element in the structure, on which it is dependent. Typically the modifier can be removed without affecting the grammar of the sentence For example: a. Review of data from the Accounting System indicates. b. In the month of so and so. 17 of 25

18 Avoid Stretched sentences Conveying the same message albeit in a lot more words For example: a. Perform the reconciliation or testing of b. Carry out the review of. c. Ensure implementation of so and so.. d. Carry out the review of 18 of 25

19 Avoid Redundant Words Using words which do not convey anything specific For example: a. Controls are inadequate or not functioning b. Inefficient process c. So and so areas need attention.. d. Large number of transactions 19 of 25

20 Avoid Repetition Using the same words more than once in the same sentence For example: a. Exception reports indicate so and so no. of exceptions b. The IRDA returns filed with IRDA suggests. c. The laptop serial number appearing in the FAR for laptop belonging to so and so 20 of 25

21 Avoid Vague sentences Sentences which do not convey any specific meaning and are general in nature For example: a. Department must review the existing process and have more controls in place to ensure that department has greater involvement in the process. b. During my discussion with so and so, I came to know that the process. c. Current QC process is random.. 21 of 25

22 Example During the review of the expense accounting process, we noted that some of the personnel in the department have not been trained periodically on how to use the accounting system. Further, we note that a few users though know few features, however, were not completely aware of all the features. Based on this analysis, we feel that the accounting system is not being used appropriately. As a result of this, we note that a few of the processes are carried out of the system i.e. manually 86 words 22 of 25

23 Example Corrected version xxx nos. of people from the Finance department who handle expense accounting and payment process are not aware of the duplicate payment and approval check which are available in the accounting system. Currently, while the approval is taken on the hard copy, there is no process to verify duplicity. 49 words 23 of 25

24 There is no more difficult art to acquire than the art of observation, and for some men it is quite as difficult to record an observation in brief and plain language - William Osler 24 of 25

25 Important points Who will draft When and How will it be drafted Who will review/edit/revise the report content Who will assesses the content for supportability based on audit documentation Who will approve the changes made to the original draft Who will sign off on the finished version of the report 25 of 25

26 Thank you